The Securities and Exchange Commission announced an emergency action aimed at reducing short-selling in Fannie Mae and Freddie Mac stock, and will immediately begin considering new rules to extend new those trading limits to the rest of the market.
SEC Chairman Christopher Cox said at a Senate Banking Cmmittee hearing that the SEC would institute an emergency order requiring any traders to pre-borrow stock before shorting Fannie Mae and Freddie Mac, the embattled government-sponsored entities that own more than half the nation's mortgages.

So the SEC is propping up Fannie and Freddie's stock prices? That's not really the SEC's job. Are they just trying to seem like they're still relevant?
UPDATE: Now the WSJ is reporting that the rule will also apply to some of the big financial houses:

It would also apply to the stocks of Lehman Brothers, Goldman Sachs, Merrill Lynch and Morgan Stanley. The order is a near-term fix and will expire in 30 days.

Why not apply the rule market-wide? The old uptick rule was routinely ignored, so why would the SEC expect a pre-borrowing rule to be any different? (I haven't practiced in the banking/securities law section in a few years, so I'm out of the loop on the possible effectiveness of a pre-borrowing rule. I'm just assuming it would be as ineffective as the uptick rule.) And if the pre-borrowing rule is also toothless, why not "enforce" it market-wide?

About Me

I'm a finance lawyer in New York. I used to focus on derivatives and structured finance (you know, back when there was a structured finance market). I spent the majority of my career at one of the major investment banks. My background is in economics and, unfortunately, politics.

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